Bernake recently gave a nationally televised interview and revealed some clear insights into the thoughts of the Federal Reserve. He points to the housing market as already weak and unlikely to go any lower preventing a double dip recession. A recovery in the unemployment rate is at least 4 to 5 years off and there’s not too many concerns over inflation.
He also comments on the banks lending less money attributed mainly to less small businesses and people trying to get these loans and more not meeting the standards and terms set by the bank.
I think the latter is the problem. The banks have pretty much put a halt on the condo market. From my estimations, about 80% of condos in Orlando can not meet the terms set by banks to receive a loan meaning you can not buy a condo in Orlando if you get a mortgage. Ya think it’s affecting the condo market? If you want to build a home through a builder, the only program available is with a 40% down payment which not that many people can afford to do. Ya think this is affecting home builders?
It seems like the banks were too loose with their standards prior to the boom and now they’re over compensating by being too stringent. Bernake doesn’t seem to see it quite that way. What do I know, I’m not the Federal Reserve chairman but I talk to a lot more people about getting loans than he does.